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is certain that, if and when the Commonwealth Government comes to this country to finance its schemes, business men will want to know, before subscribing, for what purposes the money is to be used.

Although the outlook is obscured in the Australian trade, the policy now required of British shipowners would seem to be one of enterprising development. A large amount of tonnage will be required for the direct trade with the United Kingdom, as well as for the trades between British Dominions overseas and other nations. Happily, the British Commonwealth of Nations includes some young countries which are yet little developed; and it may be in the opening up of services between these growing countries and the more densely populated lands that the genius of British shipping managers will find most scope. Unless British owners build fast, other owners will no doubt make full use of their opportunities. The United States are showing many signs of enterprise in construction, in opening up new services, and in collecting information respecting the work of British companies having offices in the United States. The spirit of pride in the possession of a great mercantile marine is being encouraged there. The workers in the shipyards are kept informed of the movements of the ships which they have built, and the merchants are being urged to ship in American vessels. The same spirit needs to be encouraged here, for such interest in and pride of work leads to good work. The right of the United States to the possession of a substantial mercantile marine is of course recognised by leading British shipping men, who consider that the policy of the two countries should be one of co-operation. The German mercantile marine, which before the war was in some trades the most formidable competitor, is not at present a factor.

Unquestionably, the United States are attacking the problem of developing a big mercantile marine with enthusiasm and vigour. How serious the nation is, was shown by the successful prosecution of their claim for the eighty-nine German liners which sought shelter in the United States at the outbreak of war in order to escape capture by Allied vessels. This claim is admittedly a delicate one, and it is remarkable that no frank statement has ever been made on the subject by

the British Government. Many of the ships will be useful in forming the foundation of American passenger lines. It would be idle to deny that a strong feeling exists in this country, and exists among many who greatly admire the United States and are proud to claim many warm American friends, that it would have been better if the ships had been placed in a common pool and distributed among the Allied and Associated Nations in proportion to their losses. The United States achieved so much in shipbuilding during the war and is capable of so much more, that the nation could well have afforded to agree to the normal method of distribution. Incidentally, it is interesting to note that the whole fleet which was seized has been appraised by a Navy Department Board as having a value of about 6,840,000l., whereas, when the decision of the United States Government to retain the ships was first announced, the sum of 20,000,000l. was mentioned.

In this brief review of shipping conditions, the development of the Japanese mercantile fleet cannot be overlooked. In the actual percentage increase it comes second only to the United States, but is still a very long way behind that nation. As compared with an increase of 382.1 per cent. for the United States, the Japanese Mercantile Marine increased during the war by 361 per cent. It consisted in June last of 2,325,000 tons, an increase of 617,000 tons. The leading Japanese companies -the Nippon Yusen Kaisha, Toyo Kisen Kaisha, and Osaka Shosen Kabushiki Kaisha-have prospered exceedingly. New lines have been opened up between Japan and India, Japan and the Pacific and Atlantic coasts, and between Japan and Europe. The Japanese Mercantile Marine was able, to a large extent, to fill the gaps made in Eastern waters left by the withdrawal of British ships to the North Atlantic. At one time the greater part of the trade from Japan to India was carried on in British ships; now the bulk of the exports are shipped in Japanese steamers. Many fine feats of construction were performed during the war, and new yards were built. The construction of a large ten-way shipyard by the Asano Shipyard Company was a notable achievement. So far, Japan has been dependent upon steel imported from this country and the United States, but iron ore

deposits are being developed in China. Japanese firms have a large interest in the Han-Yeh-Ping Iron and Coal Co. (Ltd.) at Hanyang, while the Mistu Bishi Works at Kanjiho, Korea, are being developed. The output of this latter plate-mill is now estimated at 150 tons of finished plates per day. At present Japan has no difficulty whatever about labour; and, once she secures adequate supplies of steel from neighbouring sources, her future as a shipbuilding country should be brilliant.

This country is committed, in return for shipping placed at her service during the war, to building 250,000 tons of shipping a year for Norway during the next two or three years, and a large amount of tonnage is at present in hand for France. To this extent the replacement of the British tonnage which was destroyed will be affected. But it is probably well that this country should begin again without delay to build for the rest of the world. She has in the past been shipbuilder for the world and carrier for the world. Her most pressing need is to build for herself and carry for herself. Yet, as she is at present dependent on other countries to a large degree for the imports of foodstuffs and raw materials, she must be prepared to render services in return. And to shipbuilding and shipownership she must look largely to help her to maintain her position in world-wide

commerce.

CUTHBERT MAUGHAN.

POSITION OF GREAT

Art. 13. THE ECONOMIC

BRITAIN.

1. Report of the Working Classes Cost of Living Committee (November 1918). [Cd. 8980.]

2. British and Foreign Trade and Industrial Conditions. Board of Trade Report, 1903. [Cd. 1761.]

3. Bulletin of Statistics prepared by the Statistical Department of the Board of Trade for the British Section of the Supreme Economic Council, 1918.

Bulletin No. 2.

Vol. I,

4. Course of Average Prices of General Commodities in England. By Augustus Sauerbeck. King & Son.

DURING the past five years the world has been passing through the greatest economic disturbance of which we have any record. The Great War of 1914-8 has transcended in magnitude all the conflicts of the past, and its economic effects have been correspondingly great. The fighting has ceased, and we have now an opportunity of realising, in a measure, some of the economic changes which have already been brought about by five years of world-wide war; but many years must pass before we can ascertain the full extent of these alterations, and of their reaction upon the lives of our people and the other peoples of the world. In this welter of financial uncertainty and disturbance, it is natural that there should be grave anxiety and perplexity as to our own economic position, and in particular as to the condition of the national finances; and some observations with regard to these questions may be of interest at the present time. In order to understand the economic position of the world to-day, it is necessary to examine in detail some of the principal changes which have taken place, such as the rise in wages and in commodity prices, the increase in the amount of paper money, and the growth of the National Debts of the great Powers since 1914.

All great wars have exercised a profound influence upon the economic development of the world, the extent of this influence varying with the duration of the war and the economic development of the belligerents. The figures contained in Sauerbeck's Chart show the Vol. 232.-No. 461.

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extent to which the prices of commodities have been affected by war during the past 123 years. It is not suggested that the reaction from the various wars was responsible for the whole of each of the declines recorded in the above table; nor, on the other hand, is it suggested that the whole of the rise was in each case due to war influences; but the co-relation between war and a rise in prices and peace and a fall in prices is so invariable that it admits of no other conclusion than that war has been the principal influence which has determined the changes in commodity prices. War increases consumption and causes the demand to exceed the supply; this results in a rise of prices. The rise in prices then stimulates production; and production overtakes consumption, with the result that prices fall. According to Sauerbeck, taking the average of 1867-77 as 100, the prices of commodities rose from 95 in 1790 to 167 in 1809. For eight years prices fell, until 1815, when they had declined to 100. In the three years following peace they advanced to 142. In the following four years they fell again to 101. There was then a period of very great depression; and, although prices advanced to 117 in 1825, there was a heavy fall during the seven succeeding years, which brought the average down to 89. There were recoveries in 1836 and 1840, and by 1849 the low average of 74 was reached.

The Crimean War caused a sharp rebound, but half of this rise was lost in the two years following. The American Civil War then carried prices to 105 in 1864; and six years of world-peace brought them down again to 69, on the eve of the outbreak of the Franco-German War. This war terminated in March 1871, but prices continued to rise after peace was declared, and in 1873 the high level of 111 was reached. In the five following years there was a rapid decline of 30 points to 81; with one or two short-lived upward movements prices continued to decline steadily during the succeeding seventeen years, until 1895, when the lowest level, 61, was reached. The Spanish-American and South-African Wars then caused a recovery of 14 points to 75. This was followed by a decline of six points to 69 in 1903. The Russo-Japanese (1904-5) War then caused a substantial recovery, and by 1907 the average was 80.

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